The week in GRC: Companies face proposals on advertising policies and work changes pose new risks
– The Washington Post reported that now-President Joe Biden on Monday announced that he would nominate Democrat Rohit Chopra, the former student loan ombudsman for the Consumer Financial Protection Bureau (CFPB), to lead the consumer finance agency. Biden will also nominate Gary Gensler, the former chair of the Commodities Futures Trading Commission, to run the SEC.
The choice of the Obama-era regulators to lead two important agencies overseeing the financial services industry indicates the Biden administration’s intent to provide an aggressive check on the industry after a period of deregulation under the Trump administration.
– Reuters reported that US Federal Trade Commission (FTC) chair Joseph Simons said he would resign, effective January 29, along with members of his senior staff. Simons did not say why he was leaving but the FTC’s chief typically leaves when a new administration takes office. The five-member FTC is also losing Chopra, who has been nominated to head the CFPB.
– The Wall Street Journal reported that new shareholder proposals call on Home Depot and media agency Omnicom Group to investigate whether their advertising policies inadvertently contribute to ‘violations of civil or human rights’ by funding platforms that spread inappropriate content, according to copies of the proposals filed in late 2020. The move was organized by Open MIC, an organization that uses shareholder engagement to promote causes such as diversity and privacy. Advertisers face pressure to withhold spending from controversial TV programming or social media platforms and to use their influence to push for more content moderation.
‘Omnicom is committed to ensuring our client’s ads do not appear next to harmful content on social media platforms while holding them accountable to the ethical standards our clients are demanding and with which we are aligned,’ an Omnicom spokesperson said.
‘We’re addressing the proposal through the appropriate process,’ a Home Depot spokesperson said. ‘We’re saddened and outraged by the violent attack on the US Capitol and our lawmakers, and – like others – we’re disgusted by hate speech and discriminatory content we see on social media.’
– According to CNN, a growing number of US companies are offering their workers incentives to get Covid-19 vaccines. Grocery chain Aldi said it will provide its hourly workers with two hours of pay for each vaccine dose they receive, giving workers up to a total of four hours of paid time off. Aldi said it will ‘cover costs associated with vaccine administration’ for employees who want to get vaccinated.
Dollar General, Trader Joe’s and Instacart are other companies that have made similar moves. Dollar General said it will give its workers a one-time payment equivalent to four hours of pay after receiving a completed vaccination. Trader Joe’s will give workers ‘an additional two hours of regular pay per dose for taking the time to get vaccinated,’ a spokesperson for the company said. Instacart said it will provide some financial assistance for its in-store workers and independent contractors.
– The SEC said Shelley Parratt, acting director of the division of corporation finance, is retiring next month after 35 years with the agency. Parratt joined the division in 1986, has served as its deputy director since 2003 and served as acting director of the division three separate times.
‘Shelley has been an impactful leader at the commission for decades and her contributions to the division of corporation finance during her tenure are remarkable,’ said acting SEC chair Elad Roisman. ‘During her career, she served on the leadership team of seven different division directors and led the division’s efforts to address a wide range of market and congressional developments. Shelley epitomizes the dedication and expertise that are hallmarks of the SEC’s professionals, and we owe her a great debt of gratitude for her decades of public service.’
– CNN reported that President Biden on his first day in the White House moved to rejoin the Paris Agreement on climate change, revoke a permit that former president Donald Trump granted to the Keystone XL Pipeline and place a temporary moratorium on oil and gas leasing in the Arctic.
‘I applaud President Biden’s decision to rejoin the Paris Agreement. It’s a deal made stronger with the United States as a member, and we look forward to working with the administration to meet the goals outlined within it,’ said Gretchen Watkins, president of Shell Oil Company, in a statement.
Mike Sommers, CEO of the American Petroleum Institute, said in a statement the oil-and-gas lobby supports the ‘ambitions’ of the Paris Agreement but criticized the decision to revoke the Keystone XL Pipeline permit.
– In separate filings, China Mobile, China Unicom (Hong Kong) and China Telecom said they had filed requests asking the NYSE to reverse its decision to delist their American depositary receipts (ADRs) and asking whether a trading halt on their ADRs could be lifted in the meantime, according to the WSJ.
In November, Trump signed an order barring US investors from investing in a list of Chinese companies that the US said supplied and otherwise supported China’s military, intelligence and security services. Although the three telecoms’ parent companies, which aren’t publicly traded, are covered by the ban, it was initially unclear whether the listed groups were also included. The NYSE first said it would delist them, then changed its mind, then decided it would delist them after all.
All three telecom carriers reiterated Thursday that they had complied with laws and regulations and had followed the market rules and regulatory requirements of their listing venues. The NYSE didn’t immediately respond to a request for comment made outside US business hours.
– According to the WSJ, organizations that monitor enterprise risks say the transformation of work over the past year, due in large part to Covid-19, has heightened dangers related to business continuity, cyber-security, culture and talent management. In the coming year, organizations are expected to face those and new risks related to returning to the office, such as employee retention, workplace safety and liability issues raised by employees.
The World Economic Forum (WEF) warned that companies and their workforces are under pressure as a result of financial, digital and reputational threats resulting from the pandemic. ‘As businesses transform their workplaces, new vulnerabilities are emerging,’ said Carolina Klint, a risk-management leader at insurance brokerage Marsh, said in a statement accompanying the release of WEF’s Global Risks Report 2021. ‘Rapid digitalization is exponentially increasing cyber-exposures, supply chain disruption is radically altering business models, and a rise in serious health issues has accompanied employees’ shift to remote working.’
– The SEC announced Friday that President Biden has designated Allison Herren Lee as acting chair of the SEC. ‘It’s an honor to continue my service on the commission in this new role,’ Lee says in a statement. ‘I have tremendous respect for my colleagues on the commission and the exceptional staff across the agency, and look forward to working closely with them. Together we will continue the agency’s work of protecting investors and ensuring market integrity.
‘During my time as commissioner, I have focused on climate and sustainability, and those issues will continue to be a priority for me.’
Biden has also named Gary Gensler as his pick to lead the SEC, pending confirmation.